General analysis USDJPY for 12.04.2022

Current Dynamics

Bank of Japan Board Member Asahi Noguchi and BOJ Governor Kuroda made remarks about the benefits of a weak JPY over a strong one for Japan's export-oriented economy. The soft monetary policy will continue.

Last Thursday Bank of Japan Board Member Asahi Noguchi made a speech. According to Noguchi even though some sectors could suffer from the yen weakness benefits are bigger than disadvantages. Today Bank of Japan Governor Kuroda confirmed that the regulator will continue to keep monetary policy ultra-soft in order to steadily reach its inflation target of 2%. At the same time Noguchi said that core inflation in Japan may exceed 2% as early as April due to increased energy prices, but since this rise of inflation is caused by outside factors the Bank of Japan should keep monetary policy soft to support the economy.

It should be noted that weak yen increases the cost of fuel and raw materials imports, however Japan plans to release 15 million barrels of oil in the next 6 months from its strategic reserves. That is the second largest volume of oil to be released after the USA under cooperation with the International Energy Agency.

Also, the BoJ Governor noted that Japan's financial system is generally stable, but the Bank of Japan is ready for further policy easing without hesitation as necessary.

The current account balance (excluding seasonal fluctuations) was 1.648T in February.

Today at 01:50 (GMT+2) data on bank lending will be released. Also at 01:50 (GMT+2) will be released the March Corporate Commodity Price Index (CGPI) on a year-to-year and month-to-month basis. Experts forecast 9.3% and 0.9% respectively.

Support and Resistance Levels.

USD/JPY against the background of Bank of Japan Governor Kuroda's speech, quotes broke through the key Fibonacci 100 level and locked higher. The current trend is ascending. The RSI oscillator is above the 70 level. 

• Support levels: 125.85, 125.10, 123.63, 123.17, 122.72, 122.16, 121.25
• Resistance levels: 127.50, 125.85

Trading scenarios

• Long positions are possible from the current level with target 125.85 and stop-loss 125.10 Implementation period: 1-3 days
• Short positions can be opened from below the level of 125.10 with a target of 124.20 and stop-loss 125.85: Implementation period: 1-3 days